AAFX TRADING

Daily Market Lookup

  • Asian shares dipped on Tuesday, running out of steam after a brief rally sparked by hopes that Washington and Beijing may be inching towards a trade deal and that U.S. Federal Reserve would halt its tightening if economic growth slows further. U.S. Commerce Secretary Wilbur Ross predicted on Monday that Beijing and Washington could reach a trade deal that "we can live with" as dozens of officials from the world's two largest economies resumed talks in a bid to end their trade dispute. China's Foreign Ministry said Beijing had the "good faith" to work with the United States to resolve trade frictions, but many analysts doubt the two sides can reach a comprehensive agreement on all of the divisive issues before a March deadline Investors also continued to buy battered stocks in response to strong U.S. job data on Friday and comments by Fed Chairman Jerome Powell that he was aware of the risks and would be patient and flexible in policy decisions this year Powell's comments have eased market concerns that the U.S. central bank might ignore signs of an economic slowdown and stick to its script of two rate hikes this year The U.S. dollar is losing momentum as investors wind back expectations of rate hikes and a future widening in its yield advantage. But conditions in most other developed economies aren't much to write home about, either, potentially limiting the upside for other major currencies. British and European officials are discussing the possibility of extending Britain's formal notice to withdraw from the European Union amid fears a Brexit deal will not be approved by March 29, The Daily Telegraph reported, citing unidentified sources.
  • The dollar traded lower earlier in the day after data showed the ISM non-manufacturing data for December fell to a reading of 57.6, missing expectations of 59.6. Traders are increasingly convinced the Federal Reserve will not raise interest rates this year if economic growth continues to slow, Reuters said. Some traders even expect a rate cut in 2019, it added. The Federal Reserve in December hinted that two rate hikes were on the table this year, but Fed Chairman Powell indicated last week the central bank would be willing to rein in monetary policy tightening should the need arise. Powell said that he was aware of economic risks and would be flexible in policy decision this year, easing concerns that the central bank might ignore recent data that suggested an economic slowdown. The dollar struggled for traction against its peers on Tuesday, with investors increasingly convinced the Federal Reserve will not raise interest rates this year amid risks of a sharper slowdown in global growth. The greenback was marginally firmer against the yen , after falling 0.2 percent earlier in the session as traders wagered that the monetary tightening cycle in the world's largest economy has been halted for the year. On Friday, Fed Chairman Jerome Powell told the American Economic Association the Fed is not on a preset path of rate hikes and it will be sensitive to the downside risks markets are pricing in. Powell's colleague Raphael Bostic, the Atlanta Fed President, added to the central bank's dovish tone on Monday. Bostic, who is not a voting member of the Federal Open Market Committee this year, said the Fed may only need to raise rates once in 2019. The dollar had gained 4.3 percent in 2018 as the Fed hiked rates four times on the back of a strong domestic economy, falling unemployment and rising wage pressures But market expectations for further Fed tightening this year have shifted markedly in the last few months, with some traders now expecting even a rate cut this year. Financial markets have been rattled by heightened worries about slowing global growth, especially in the United States and China, though data on Friday showed strong U.S. job growth. Expectations of no further rate hikes this year are likely to keep the greenback under pressure. The euro's recent strength has surprised some analysts as growth and inflation remain weak in the eurozone, well below European Central Bank forecasts.
  • Oil prices were stable on Tuesday, supported by hopes that talks in Beijing between U.S. and Chinese officials might defuse trade disputes between the world's biggest economies, while OPEC-led supply cuts also tightened markets. U.S. Commerce Secretary Wilbur Ross said on Monday that Beijing and Washington could reach a trade deal that "we can live with" as dozens of officials from China and the United States held talks in a bid to end a trade spat that has roiled global markets since last year. Despite optimism around the talks in Beijing, some analysts warned that the relationship between Washington and Beijing remained on shaky grounds, and that tensions could flare up again soon. There is also concern that a worldwide economic slowdown will dent fuel consumption. As a result, the hedge fund industry has cut back significantly its bullish positions in crude futures. Looking at oil supplies, 2019 crude prices have been supported by supply cuts from a group of producers around the Middle East-dominated OPEC as well as non-OPEC member Russia. As a result, U.S. crude oil production rose by a whopping 2 mn bpd last year to a world record 11.7 mn bpd With drilling activity still high, most analysts expect U.S. oil production to rise further this year. Consultancy JBC Energy said it was likely that U.S. crude oil production was already "significantly above 12 mn bpd" by early January.

 

 
Intraday RESISTANCE LEVELS
8th January 2019 R1 R2 R3
GOLD-XAU 1.289 1,300-1,309 1,315
Silver-XAG 15.80-16.00 16.40 17.00
Crude Oil 49.00-49.50 50.20 51.00
EURO/USD 1.1460 1.1490 1.1560-1.1600
GBP/USD 1.2800 1.2850-1.2895 1.2940
USD/JPY 109.10 111.00 111.00

Intraday SUPPORTS LEVELS
8th January 2019 S1 S2 S3
GOLD-XAU 1,282 1,274 1,266-1,260
Silver-XAG 15.40 15.10 14.90-14.75
Crude Oil 48.50-48.00 47.60 47.00-46.50
EURO/USD 1.1420-1.1390 1.1345 1.1300-1.1260
GBP/USD 1.2760-1.2700 1.2660 1.2600-1.2550
USD/JPY 108.50-108.10 107.50 107.05-106.60

Intra-Day Strategy (8th January 2019)
GOLD-XAU Buy on Dips
Silver-XAG Neutral
Crude Oil Neutral
EUR/USD Neutral to Buy
GBP/USD Neutral to Buy
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Monday made its intraday high of US$1295.01/oz and low of US$1282.51/oz. Gold up by 0.283% at US$1288.90/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1251) and breakage below will call for 1246-1236. MACD is above zero line and histograms are increasing trend and it will bring upward stance in the upcoming sessions. RSI is in overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in overbought territory and giving positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1282-1260 with risk below 1260, targeting 1294-1300-1309 and 1315-1324. Sell below 1294-1321 keeping stop loss closing above 1321, targeting 1284-1274 and 1266-1260.

 
Intraday Support Levels
S1     1,282
S2     1,274
S3     1,266-1,260
Intraday Resistance Levels
R1     1.289
R2     1,300-1,309
R3     1,315

Technical Indicators

Name   Value Action
14DRSI  

68.171

Buy
20-DMA   1259.30 Buy
50-DMA  

1237.54

Buy
100-DMA   1220.00 Buy
200-DMA   1250.09 Sell
STOCH(5,3)   75.907 Sell
MACD(12,26,9)   15.891 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$15.80/oz and low of US$15.60/oz. Silver settled down by 0.509% at US$15.62/oz.

Technicals in Focus:

On daily charts, silver is sustaining above100DMA (14.50), breakage below will lead to 14.30-13.60. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in oversold region, indicating buy signal for now. The Stochastic Oscillator is in overbought region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above, buy above 15.60-14.75 targeting 15.80-16.00 and 16.40-16.80-17.00.; stop breakage below 14.75. Sell below 15.80-17.00 with stop loss above 17.00; targeting 15.60-15.10-14.90 and 14.75 14.40.

 
Intraday  Support Levels
S1     15.40
S2     15.10
S3     14.90-14.75

Intraday  Resistance Levels
R1     15.80-16.00
R2     16.40
R3     17.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   74.66 Buy
20-DMA   14.77 Buy
50-DMA   14.54 Buy
100-DMA   14.50 Buy
200-DMA   15.36 Sell
STOCH(5,3)   93.409 Sell
MACD(12,26,9)   0.305 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$49.95/bbl, intraday low of US$48.27/bbl and settled up by 0.184% to close at US$48.92/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 50DMA i.e. 66.10 which is a resistance level and breakage above will call for 66.80-67.08. MACD is above zero line and histograms are in increasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in overbought region and giving negative crossover for confirmation of bearish stance; while the RSI is in oversold region and more downside can be expected.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 49.00-51.20 with stop loss at 51.20; targeting 48.50-47.60-47.00 and 46.45-45.50. Buy above 48.50-46.50 with risk daily closing below 46.50 and targeting 49.00-49.50 and 50.20-51.00.

 
Intraday Support Levels
S1     48.50-48.00
S2     47.60
S3     47.00-46.50

Intraday Resistance Levels
R1     49.00-49.50
R2     50.20
R3     51.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.856 Sell
20-DMA   47.92 Sell
50-DMA   53.26 Sell
100-DMA   61.69 Sell
200-DMA   64.87 Sell
STOCH(5,3)   80.750 Buy
MACD(12,26,9)   -1.667 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1393/EUR, high of US$1.1481/EUR and settled the day up by 0.702% to close at US$1.1473/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1480), which become immediate resistance level, break below will target 1.1560-1.1600. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral territory and giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently approaching oversold region and giving wards directions to consider sell.

Trading Strategy: Neutral to Buy

Buy above 1.1390-1.1210 with risk below 1.1210, targeting 1.1420-1.1460-1.1490 and 1.1540-1.1600. Sell below 1.1420-1.1600 targeting 1.1390-1.1345 and 1.1300-1.1260-1.1215 with stop-loss at daily closing above 1.1600.

 
Intraday Support Levels
S1     1.1420-1.1390
S2     1.1345
S3     1.1300-1.1260

Intraday  Resistance Levels
R1     1.1460
R2     1.1490
R3     1.1560-1.1600

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.514 Buy
20-DMA   1.1380 Buy
50-DMA   1.1366 Sell
100-DMA   1.1476 Sell
200-DMA   1.1652 Sell
STOCH(5,3)   36.754 Sell
MACD(12,26,9)   0.0008 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2711/GBP, high of US$1.2786/GBP and settled the day up by 0.471% to close at US$1.2830/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.3096) is become major support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in neutral territory and giving positive crossover to confirm bullish stance. MACD is above zero line but histograms are increasing lead to downward movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; sell below 1.2800-1.2940 with targets at 1.2760-1.2700-1.2660 and 1.2600-1.2550. Buy above 1.2760-1.2490 with targets 1.2800-1.2850 and 1.2900-1.2940 with stop loss closing below 1.2490.

 
Intraday Support Levels
S1     1.2760-1.2700
S2     1.2660
S3     1.2600-1.2550

Intraday Resistance Levels
R1     1.2800
R2     1.2850-1.2895
R3     1.2940

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

55.236

Buy
20-DMA   1.2647 Sell
50-DMA   1.2771 Sell
100-DMA   1.2894 Sell
200-DMA   1.3150 Sell
STOCH(5,3)   87.636 Sell
MACD(12,26,9)   -0.0033 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY108.01/USD and made an intraday high of JPY108.73/USD and settled the day up by 0.206% at JPY108.70/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (111.82), which is major support on the daily chart. 14-D RSI is currently in overbought region and chances of downward are expected based on RSI. MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is approaching overbought territory and signaling to buy as it has given positive crossover to confirm bullish stance.

Trading Strategy: Neutral to Sell

Sell below 109.10-111.00 with risk above 111.00 targeting 108.50-108.10 and 107.70-107.05-106.60. Long positions above 108.50-106.60 with targets of 109.10-109.60 and 110.20-111.00 with stop below 107.00.

 
Intraday Support Levels
S1     108.50-108.10
S2     107.50
S3     107.05-106.60

INTRADAY RESISTANCE LEVELS
R1     109.10
R2     111.00
R3     111.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   35.168 Buy
20-DMA   111.13 Sell
50-DMA   112.39 Sell
100-DMA   112.25 Buy
200-DMA   112.08 Buy
STOCH(9,6)   72.250 Buy
MACD(12,26,9)   -1.171 Sell

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